Marketing key for Samsung

8 April 2013

SEOUL: Samsung, the electronics giant, spent $1.3bn more on marketing than research and development last year, as it vied with Apple for leadership in the global smartphone market.

The company poured a record $11.6bn into its marketing efforts compared with the $10.3bn that went on R&D, Reuters reported. This trend is expected to continue this year as the company attempts to balance innovation and chasing market share.

"Apple created a new category with tablets. We are waiting to see something like that happen from Samsung," Rachel Lashford, an analyst at research firm Canalys in Singapore, told Reuters.

"There is not that much visibility on products next year, but we expect Galaxy Note 3 later this year," added Mark Newman, a senior analyst at Stanford Bernstein in Hong Kong.

But not everyone was so downbeat. "Samsung have boosted their smartphone R&D workforce to 25,000 or so from less than 20,000," said Lee Do-hoon, an analyst at RBS. "I think they have an exciting product lineup ready, probably in the second half, to upend the market."

In particular, he expected the new Note 3 smartphone model to be innovative. "It'll have a bended display and the screen size will be bigger without having a bigger phone," he said.

A Samsung spokesman said: "We'll keep boosting our R&D spending, while marketing will be executed flexibly according to market conditions."

With the smartphone market in developed countries approaching saturation, Samsung has targeted emerging markets with a range of models at different price points while rival Apple continues to rely on a single high-end model.

In the US, Samsung lags behind Apple, with recent comScore MobiLens data indicating it had a 21.3% market share in the three months to February 2013, up one percentage point on the previous quarter, while Apple was on 38.9%, up 3.9 points.

Other manufacturers were a long way back, with HTC having a 9.3% share, Motorola 8.4% and LG 6.8%.